Those Sneaky Sublimits

The personal property stored in your home is insured for a predetermined percentage of the total home coverage (calculated as a percentage of the Coverage  A amount). However, that calculated amount has other limitations that apply to it in the event of a loss. These limitations are called Sublimits, and almost all Homeowner's and Renter's policies have them. Find out how Sublimits work, and how they affect claim settlements!

Sublimits are in all standard Homeowner's and Renter's policies, and there are multiple Sublimits that can apply. While you have the general, overall amount of personal property insurance coverage, Sublimits apply to predetermined categories of items (E.g. Sublimits for guns, Sublimits for jewelry, etc.) and they reduce the amount of insurance you can collect on for these categories. Each Sublimit will have a total limit, and if you have a property loss higher than the Sublimit limit, the amount over it will not be covered. 

The following is a non-exclusive list containing many of the categories that may be subject to a Sublimit:

  • Money, Bank Notes, Gold, Silver, Platinum, and Other Precious Metals
  • Securities, Deeds, Passports, Tickets, Stamps
  • Watercraft & Equipment
  • Musical Instruments
  • Trailers (non-watercraft)
  • Jewelry, Watches, and Furs
  • Firearms & Equipment
  • Silverware & Goldware
  • Trees, Shrubs, & Other Plants (subject to a % of Coverage A, and a per-item limit)
  • Fire Department Service Charge
  • Grave Markers
  • Land Stabilization
  • Ordinance or Law
  • Refrigerated Products
  • Electronic Media
  • Fire Extinguisher Recharge/Replacement
  • Increased Day Care Expense
  • Computer Records
  • Fungi/Wet Rot/Dry Rot/Bacteria Coverage
  • Damage to Property of Others

The total limit of the Sublimit of each category varies from insurer to insurer. Some insurers will allow you to change the Sublimit amount, and some will not. The typical range of a Sublimit is from $500-$5000, depending on the category and the insurer. Furthermore, some insurers may exclude some categories entirely, or may not have a Sublimit for a category (always make sure to check the Sublimits when buying a Homeowner's or Renter's policy!). 

Example Claim Scenario:

Let's say your house and all of your belongings burnt down. Let's also say you had a fine watch collection worth $50,000. Almost all policies have a Sublimit on jewelry/watches, and your policy (for this example) had a Sublimit of $5,000. You probably have other jewelry and your spouse or children may have watches and jewelry as well. Since the Sublimit amount for watches and jewelry is $5,000, $45,000 of this claim would not be paid.

How Do I Make Sure I'm Properly Covered?

As mentioned above, some insurers will allow you to increase the amount of the Sublimit. Unless you have a large collection, or have a really expensive item, simply increasing the Sublimit for that category will adequately cover you. If your insurer won't allow you to increase the Sublimit to an adequate level, you can Schedule your property. By scheduling your property, you can individually insure your high-valued items to properly cover them. In cases of large collections or really expensive single items, Scheduling should be your first option.

Note: All property insurance is subject to a Cause of Loss Form and a property Valuation. Having your items properly insured goes farther than managing Sublimits and Scheduling.